Betting early on tech has big upsides
September 24, 2014 in Medical Technology
The healthcare industry has traditionally been knocked for its slowness in adopting technology. A new Harvard study suggests that being late to the IT party could seriously hamper business growth.
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“There is a correlation between the early adoption of new technologies and better business outcomes,” wrote the authors of a recent Harvard Business Review Analytic Services report, sponsored by Verizon.?
“IT Pioneers – companies that believe strongly in the benefits of adopting new technologies and that pursue first-mover advantage – are more likely to lead in both revenue and market position,” according to the study. “They adapt more easily to new ways of doing business and are transforming all aspects of their businesses faster than other companies.”
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In its report, HBR breaks the business world into three distinct IT types: pioneers, followers and the cautious.
Of the 672 participants in HRB’s research, 11 percent identified as working in healthcare. Roughly one-third of those healthcare companies aim for that first-mover advantage, while another third follow behind once they can learn about the pioneers’ experience with new IT products. The cautious simply opt for proven technologies.
Other market segments – most notably technology, but also consulting and energy – boast higher concentrations of pioneers.
“By far the most intriguing finding in the research is the correlation between the early adoption of new technology and company performance,” according to the authors. “Pioneers are growing faster than other companies and beating their counterparts.?
“Twenty percent have experienced more than 30 percent growth, twice that of Followers and more than three times that of the Cautious,” they added. “Firms that identified themselves as cautious were the most likely to report no growth.”
Backing start-up technology ventures is risky business, but health insurer Aetna, cognizant of the first-mover advantage, believes it is a risk worth taking if done smartly.
Every week, Jim Routh, Aetna’s chief information security officer, and his team (60 to 70 people) invest about 90 minutes looking at new technology.
“We don’t make our bets blindly,” Routh said, adding that one of the big criteria Aetna uses for choosing start-ups is their ability to attract top tech talent.
Technology costs, of course, are another consideration.
When Routh – whose former positions include serving as JP Morgan Chase’s global head of applications, mobile and Internet security – was approached on the street by a former Cisco engineer pitching a new start-up offering an email authentication software that blocks phishing spammers, he took the time to listen and follow up.?
Aetna backed that startup and the rewards have been “a trifecta,” Routh said. The software now blocks some 10 million phishing emails a year – reducing risks to consumers, cutting operating costs because Aetna is not dealing with unhappy customers and increasing revenue.
And there’s another competitive advantage, Routh told an audience at the Healthcare IT News and HIMSS Media Privacy and Security Forum, held in earlier this month in Boston.
“If the spammers are not making money from spamming Aetna consumers, which consumers are they going to spam next?” Routh joked. “I’ll help you: Not me. Your problem just got bigger.”